Skip to main content

Auto Enrolment: A new pension regime for employers

Introduction The Government has introduced automatic enrolment to help more people save for the future. This means that employers will need to automatically enrol some workers into a pension scheme and give other workers the option to join.

When is it happening?  Employer’s duties are being introduced in stages. The date your employer duties first apply is known as your staging date and it’s based on the number of people in your largest Pay as You Earn (PAYE) scheme on 1st April 2012.

What is the effect on your workforce? You will need to assess your workforce to determine whether they are classified as a “worker”. There are three different categories of “worker”, determined by their age and how much they earn. For many of your staff, it will mean that they will have to contribute to a pension scheme unless they make a conscious decision to “opt-out”.

What are my employer duties? Your employer duties will depend on the types of worker you employ. You’ll need to automatically enrol some workers into a pension scheme and arrange membership for others. You are also responsible for the ongoing maintenance of the scheme and have an obligation to keep certain records. You will be required to set up, administer and contribute to a pension scheme on behalf of your staff.

What is the effect on pension schemes? You must register that you have an automatic enrolment scheme in place with the Pension Regulator (TPR) within four months after your staging date. You will also have to re-register every three years. The good news is, if you have an existing pension scheme, you can use this to meet your employer duties as long as it meets certain criteria.

What happens if I do nothing? Your employer duties are not optional. The TPR will be responsible for ensuring that you comply with your employer duties. Although the approach will be to educate and encourage compliance, you could face substantial fines or even imprisonment if you don’t comply.

These rules can be quite confusing for small charities and so Charity Advisory Services have teamed up with a firm of professional advisers to provide a service especially for small charities and not-for-profit organisations.

They will work with you to help you understand and prepare for the changes you will have to make and the quicker you act the more time they will have to consider your options and advise you on the most appropriate strategy for your organisation.

If you would like to know more please contact us.

Return to index